The rapid increase in the price level suggests that we may soon break the 5% barrier in the next few months. However, analyzing the data, we notice serious reasons to believe that we will not exceed this border, even though we are only 0.1% off. Prices in Germany are growing more slowly, and the readings from the USA are again ambiguous.
Inflation already at 4.9%
On Monday, we learned the inflation rate on an annual basis. The result of 4.9% may be worrying, but one should look at the data more broadly. On a monthly basis, inflation increased only by 0.1%. So why did the annual indicator jump so strongly? The explanation for this phenomenon are readings from the previous year. Last year’s September was deflation on a monthly basis. The moment last September’s decline stopped being counted in annual results, and the minimal increase for September 2024 started to count, we naturally had to see increases. In the same way, in October – and especially in November – we should see a slowdown in price hikes, as they accelerated last year during these months. The market did not react to these data, as they were in line with the analysts’ forecasts.
Decline in inflation in Germany
Yesterday we also learned data from Germany. The annual price growth rate was only 1.8%, just like in Poland – 0.1% below expectations. Unlike our country, this is a result consistent with the inflation target. The value is exactly equal to the average for the euro area. What’s more, this is also more than twice as low as the main interest rate, which currently stands at 3.65%. As a result, these data were a factor in weakening the euro against the dollar. They thus open the gates wide to further interest rate cuts on the old continent.
Data from across the ocean
Yesterday, we learned about two major readings from the other side of the ocean. The Chicago PMI Index showed 46.6 pts. This might seem like a weak result because it’s below 50 pts. However, it is important to note that this is a result 0.4 pts above analysts’ expectations and the second highest this year. Only in June did the surveyed show greater optimism. The second reading was not so optimistic. The Dallas FED Index for industry was -9 pts, against expected -4.5 pts. However, the markets maintained a positive attitude towards the dollar, despite the weaker second data.
Maciej Przygórzewski – chief analyst at InternetowyKantor.pl
Source: https://ceo.com.pl/inflacja-w-polsce-zbliza-sie-do-5-16170
